A Guide to The Renters (Reform) Bill
As many of you have probably already heard, there are going to be some big changes made in the lettings industry in the near future. As a landlord, I am sure you have many questions about what these changes are going to be and when these changes will come into action.
I have made a brief guide of the changes which are most likely going to be put into place on the white paper (legislation and law) Parliament are still in talks about The Renters (Reform) bill, so we don’t know the exact details to everything just yet. But when we do, we will let you know.
So, let’s get started.
Changes to contracts and serving notice to a tenant:
- There will no longer be Assured Shorthold Tenancies, this will be replaced with Assured Tenancies, this is the contract we had back in the 1990s.
- Section 21 (non-faults eviction) will be abolished, and a landlord will only be able to use a section 8 notice on the Assured Tenancy to serve notice to a tenant.
- All Assured Tenancies will be immediately periodic. So, with this, there will no longer be a fixed term at the start of the tenancy. The Assured Tenancy will be for just 1 month and then roll from there.
- Existing fixed term Assured Shorthold tenancies commencing the date the Act is brought in will remain valid, anything after the commencement date will be Assured Tenancies.
- Current Assured Shorthold Tenancies at the end of the fixed term will drop onto the new Assured Tenancy by law.
- A Section 21 notice will still be valid if a tenant is still in a fixed term Assured Shorthold Tenancy, up until the fixed term ends.
- All tenants will have to give a landlord at least two months’ notice on the Assured Tenancy.
- A landlord serving notice to a tenant will be between 0-2 months’ notice depending on which ground can be served. Please remember notice will only be served on a tenant if one of the grounds on the section 8 notice is met.
- Section 8 grounds will be strengthened so a landlord can still gain back possession of their property if they either want to sell the property, move back in themselves or rent to a family member.
- If a landlord is wanting to sell a property, or a family member wants to move in, or the landlord wants to move back into the property themselves, there will be a mandatory ground in the section 8 where a landlord can serve notice to a tenant only after 6 months of a tenant living in the property. The notice period for this will be 2 months’ notice to the tenant.
- Landlords cannot re-let a property for at least a period of 3-months after a tenant vacates if notice has been given to the tenant.
Changes to tenant fees and pets:
- If a tenant wants to get a pet at the property, they must write to the landlord/agent to ask if they can have that particular pet. A landlord cannot unreasonably refuse consent to a tenant having a pet at the property.
A landlord/ agent must respond within 42 days to the request. If the freeholder does not respond to the landlord, then a pet can be refused by the landlord as there is no consent off the freeholder. If a head lease states no pets, this will probably be acceptable to refuse. But Parliament may make these clauses unlawful. At the moment, we are not sure what ‘unreasonable’ would actually be.
- Pet damage insurance will be a permitted payment under tenant fee act. – The Renters (Reform) specifies that either the tenant can take pet damage insurance out themselves and provide proof to the landlord, or a landlord can take out the policy themselves and put the cost on the tenants rent each month. I would say the landlord would be safer taking out the policy and charging the tenant, as the tenant may stop paying the monthly insurance fee, therefore the insurance would be void.
Rent increases:
- Rent can be increased once a year, there is no cap on what the increase can be, as long as it’s fair and reasonable.
- A landlord cannot give notice if a tenant refuses a rent increase, but a tenant cannot refuse to pay an increase. A section 13 (increase
form) is not up for negotiation. If a tenant is not happy with the rent increase, they would need to contact the Tribunal and they will decide if the increase takes place or not. If a tenant just ignores the landlord/ agent rent increase request, the landlord will have to wait until the tenant is in 2 months arrears from the default of not paying the increase, and then serve a section 8 notice.
Redress Scheme and Landlord Portal:
- All landlords must register themselves and their properties on a new property portal.
- The register will be public and will include details of any banning orders.
- There will be fees to join but we are not yet sure of the amount.
- Agents or landlords will not be able to advertise a landlord’s property until their name and property is on the landlord portal, or the registration numbers are given to the agent.
- Once a landlord registers themselves and their properties, they will be given registration numbers, the agent cannot register on the landlord’s behalf.
- All landlords will need to also register themselves to the Redress Scheme, again there may be a fee to this, we are not to sure yet.
When will these changes happen?
These changes could be pushed through to Parliament before the next General Election. There are rumours to say they could come into place on the 1st October 2024, but no date has been confirmed.
I hope this guide gives you a brief outline of the changes likely to be made in the future. If you do have any questions on any of the new changes or have any worries about the proposed changes, please contact me at the office on 01744 371 371.
